ex10_24.htm


    
      

    

    Exhibit
10.24

     

    

       

      December
16, 2009

      


      Axcan
Holdings Inc.

      597
Boulevard Laurier

      Mont-Saint-Hilaire,
QC J3H 6C4

      


      Re:           Advancement and
Indemnification Rights

      


      In light
of recent court decisions concerning the rights of corporate directors and
officers (including directors designated by sponsor shareholder investors) to
advancement of expenses and indemnification, TPG Capital, L.P. ("TPG") and Axcan
Holdings Inc. (the "Company" or "Axcan") have agreed
to enter into this Letter Agreement (the "Agreement") to
clarify their understandings with respect to certain
matters.  Capitalized terms not defined elsewhere in this Agreement
are used herein as defined in Section
3.

      


      This
Agreement clarifies certain rights of (i) TPG, (ii) any TPG Affiliate or other
persons or entities providing management, advisory, consulting or other services
at the direction or request of TPG or any TPG Affiliate to or for the benefit of
the Company or any successors or direct or indirect parents or subsidiaries of
the Company (collectively, "Axcan Companies")
(iii) any Fund; (iv) any persons designated by TPG, any TPG Affiliate or any
Fund to serve as a director, officer, board observer, partner, trustee,
fiduciary, manager, employee, agent or functional or foreign equivalent of the
foregoing, of or to any of the Axcan Companies or of or to any partnership or
joint venture of which any Axcan Company is a partner or member (collectively,
the "TPG
Designees"); and (v) any direct or indirect partners (including
general partners), shareholders, members (including managing members),
controlling persons,  directors, officers, fiduciaries, managers,
employees and agents of each of the foregoing  (those persons and
entities identified in (i), (ii), (iii), (iv) and (v) are herein referred to
collectively as the "Indemnitees," and
individually as an "Indemnitee"), where
such rights exist under applicable law or pursuant to an Organizational
Document, Management Agreement or any other agreement or document of an Axcan
Company or to which an Axcan Company is a party (herein referred to collectively
as the "Axcan
Indemnity Undertakings").  For clarity, this Agreement is not
an Axcan Indemnity Undertaking.

      


      The
parties intend that (i) the Axcan Companies are and shall at all times be the
indemnitors of first resort with respect to any and all matters for which
advancement of expenses and indemnification are provided by the Axcan Companies
to or on behalf of any Indemnitee, without regard to the time of any related
claims and liabilities or of any act, statement or omission relating thereto,
(ii) the advancement of expenses and/or indemnity for each Indemnitee shall be
on a primary basis, and (iii) any Indemnitee may be expected to seek advancement
of expenses and/or indemnification from any other potential source of such
advancement or indemnification (including from any other Indemnitee) only if,
and to the extent, that the Axcan Companies are not legally required and/or
financially unable to advance expenses and/or indemnify, as the case may be, to
or on behalf of such Indemnitee.


      
        
           


        

        
           


          
            

          

        

        
           


        

      


      In
consideration of the mutual agreements herein contained, and other good and
valuable consideration – including TPG's agreement (or the agreement of any TPG
Affiliate) to provide management, advisory or other services to the Axcan
Companies and the agreement of TPG Designees to serve one or more Axcan
Companies – the receipt and sufficiency of which is hereby acknowledged, all
parties intending to be legally bound, hereby agree as follows:

      


      1.           Company is Primary
Indemnitor.

       

      Each of
the undersigned Axcan Companies hereby acknowledges and agrees that (a) each of
the undersigned Axcan Companies is an indemnitor of first resort with
respect to an Axcan Indemnity Undertaking ; (b) the obligations of the
Axcan Companies to each Indemnitee under Axcan Indemnity Undertakings are
primary, and any obligations of TPG, any TPG Affiliate or any Fund or other
Indemnitee to provide advancement of expenses or indemnification for any Losses
incurred by Indemnitee and for which any Axcan Company is obligated to indemnify
an Indemnitee under an Axcan Indemnity Undertaking  are secondary, and
(c) if TPG, or any TPG Affiliate, Fund or other Indemnitee, is obligated to pay,
or pays, or causes to be paid for any reason, any expense or Loss which any
Axcan Company is otherwise obligated to pay to or on behalf of Indemnitee under
an Axcan Indemnity Undertaking, then (x) such TPG, TPG Affiliate, Fund or other
Indemnitee, as the case may be, shall be fully subrogated to and otherwise
succeed to all rights of Indemnitee with respect to such payment, including with
respect to any rights to claim such amounts from any of the Axcan Companies and
(y) each undersigned Axcan Company shall jointly and severally guarantee
performance of this Agreement by the Axcan Companies.

      


      2.           Specific Waiver of
Contribution, etc.

       

      Each
undersigned Axcan Company hereby unconditionally and irrevocably waives,
relinquishes and releases (and covenants and agrees not to exercise, and to
cause each affiliate of any Axcan Company not to exercise), any
claims  that any Axcan Company may now have or hereafter acquire
against any Fund or other TPG Affiliate, whether pursuant to any right of
contribution, subrogation, indemnification or otherwise,  to require
it to reimburse any expense or Loss which any Axcan Company is obligated to pay
another Indemnitee under an Axcan Indemnity Undertaking.

       

      3.           Definitions.  As
used in this Agreement, the phrase "including" shall not be deemed to be a term
of limitation but rather shall be construed to mean "including, without
limitation" and the following terms are used with the meaning set forth
herein:

       


      
        
           


        

        
           


          
            

          

        

        
           


        

      

      
         

        
          	
                  (a)

                	
                   "Losses"
      means any and all damages, judgments, liabilities, assessments, fines,
      penalties, amounts paid in settlement, fees and costs (including attorneys
      fees and costs) or other losses.

                


        

         

      

      
        	
                (b)

              	
                "Management
      Agreement" means any advisory, management, monitoring or other
      similar or equivalent agreement.

              


      

       

      
        	
                (c)

              	
                "Fund" means any
      investment fund formed or managed by TPG or any TPG Affiliate or for which
      TPG or any TPG Affiliate serves as an investment adviser including without
      limitation TPG Partners V, L.P., and any other partnership, limited
      liability company or other legal entity that is a TPG Affiliate which
      directly or indirectly owns equity securities of the Company or any other
      Axcan Company.

              


      

       

      
        	
                (d)

              	
                "Organizational
      Document" means an entity's charter, by-laws, partnership
      agreement, limited liability company agreement, operating agreement,
      indemnification agreement, or other similar or equivalent agreement or
      document.

              


      

       

      
        	
                (e)

              	
                "TPG Affiliate"
      means any entity that, directly or indirectly, (i) is controlled by, (ii)
      controls or (iii) is under common control with, TPG; provided that, under
      no circumstances shall any portfolio company of TPG (including any Axcan
      Company) be deemed a TPG Affiliate
hereunder.

              


      

      
         

        
          	
                  4.

                	
                        
                    Miscellaneous.

                  

                


        

         

      

      
        	
                (a)

              	
                This
      Agreement may be amended, modified, extended or terminated (and the
      provisions hereof may be waived) only by a written agreement specifically
      identified as such and signed by TPG and the relevant Axcan
      Company.  No oral amendment, modification or waiver of this
      Agreement shall be effective.

              


      

       

      
        	
                (b)

              	
                An
      Indemnitee's rights under this Agreement and any Axcan Indemnity
      Undertaking that gives rise to indemnification and/or advancement rights
      are present contractual rights that shall fully vest upon any Indemnitee's
      first service as a director, officer, board observer, fiduciary, partner,
      trustee, manager, employee, agent or functional or foreign equivalent of
      any of the foregoing of any of the Axcan Companies.  No
      amendment, alteration or repeal of this Agreement or any other such
      agreement or document or of any provision hereof or thereof validly
      effected shall limit or restrict any right of Indemnitee under this
      Agreement or such agreement or document in respect of any act, omission or
      statement of such Indemnitee occurring prior to such amendment, alteration
      or repeal. No right under this Agreement may be exercised by or with
      respect to an Indemnitee after a period ending on the sixth (6th)
      anniversary of the date such Indemnitee ceased being a director, officer,
      board observer, fiduciary, partner, trustee, manager, employee, agent or
      functional or foreign equivalent of any of the foregoing of any of the
      Axcan Companies

              


      

       

      
        	
                (c)

              	
                Nothing
      in this Agreement shall be construed to require:  (i) TPG, any
      TPG Affiliate or any other person or entity to continue to provide
      management, advisory, consulting or other services, or (ii) any TPG
      Designee to continue to serve as a director, officer or agent of any Axcan
      Company (or in any other capacity).  No Indemnitee's rights
      hereunder shall be limited or impaired in any way if such Indemnitee
      ceases, for any reason, to serve or provide services to any Axcan
      Company.

              


      

       


      
        
           


        

        
           


          
            

          

        

        
           


        

      


      
        	
                (d)

              	
                To
      the extent permitted by applicable choice of law principles, this
      Agreement and all claims arising out of or based upon this Agreement or
      relating to the subject matter hereof shall be governed by and construed
      in accordance with the substantive laws of the State of Delaware without
      giving effect to any choice or conflict of law principles or rules that
      would result in the application of the domestic substantive law of any
      other jurisdiction.

              


      

       

      
        	
                (e)

              	
                Except
      as, and to the extent, expressly provided herein, (i) no right or remedy
      herein conferred is intended to be exclusive of any other right or remedy,
      and every other right and remedy shall be cumulative and in addition to
      every other right and remedy given hereunder or now or hereafter existing
      at law or in equity or otherwise, so long as such right or remedy does not
      conflict with any right or remedy provided hereunder, (ii) any and
      all rights to advancement of expenses and/or indemnification to which each
      Indemnitee has ever been, is or may in the future be entitled from the
      Axcan Companies shall remain unchanged by this Agreement and (iii) the
      assertion or employment of any right or remedy hereunder, or otherwise,
      shall not prevent the concurrent assertion or employment of any other
      right or remedy.  To the extent that any term or condition of
      this Agreement conflicts with any term or condition under any Axcan
      Indemnity Undertaking or under any other agreement or document to which
      any of the Axcan Companies and an Indemnitee are parties or by which
      they  are otherwise together bound with respect to the subject
      matter of this Agreement, the terms and conditions of this Agreement shall
      control.

              


      

       

      
        	
                (f)

              	
                Each
      Indemnitee that is not a direct party hereunder is and shall be considered
      an express third-party beneficiary hereunder and shall be entitled to
      enforce this Agreement to the same extent as a party hereunder provided it
      provides prior written notice to the Axcan Companies of its intention to
      seek the benefit of this Agreement.

              


      

       

      
        	
                (g)

              	
                If
      any provision or provisions of this Agreement shall be held to be invalid,
      illegal or unenforceable for any reason whatsoever:  (i) the
      validity, legality and enforceability of the remaining provisions of this
      Agreement (including each portion of any section or subsection of this
      Agreement containing any such provision held to be invalid, illegal or
      unenforceable, that is not itself invalid, illegal or unenforceable) shall
      not in any way be affected or impaired thereby; (ii) such provision or
      provisions shall be deemed reformed to the extent necessary to conform to
      applicable law and to give the maximum effect to the intent of the parties
      expressed herein; and (iii) to the fullest extent possible, the provisions
      of this Agreement (including each portion of any section or subsection of
      this Agreement containing any such provision held to be invalid, illegal
      or unenforceable, that is not itself invalid, illegal or unenforceable)
      shall be construed so as to give effect to the intent manifested
      thereby.

              


      

       

      
        	
                (h)

              	
                This
      Agreement may be executed in any number of counterparts and by each of the
      parties in separate counterparts, each of which when so executed will be
      deemed to be an original and all of which together will constitute one and
      the same instrument.

              


      

       


      
        
           


        

        
           


          
            

          

        

        
           


        

      


      Very truly yours,

       

      


       

      
        	 
      	
                TPG
      Capital, L.P.

                By:           Tarrant
      Capital, LLC

                 

                By:  _/s/______________________________

                Name:  Clive
      D. Bode

                Title:   Vice
      President and Secretary

              
	 
      	 
      


      

      


      ACKNOWLEDGED
AND AGREED TO as of the date of this letter.

      


      


      
        	
                Axcan
      Holdings, Inc.

                 

                By:  __/s/_____________________________

                Name:

                Title:

                 

                 

              	
                Axcan
      Pharma Inc.

                 

                By:  __/s/_____________________________

                Name:

                Title

              


      

      


       

      Axcan
Pharma US,  Inc.

       

      By:  __/s/_____________________________

      Name:

      Title